Detroit city attorney: I told you this would happen; any loss of funding not my fault

12:14 PM, June 11, 2012

Krystal Crittendon / Detroit Free Press

Detroit Free Press Staff Writer

Mayor Bing tells city council lawsuit must be drop...: Mayor Dave Bing bluntly told the City Council this morning that city leaders are playing a dangerous game if they do not get the city’s top lawyer pull back on a lawsuit that could lead the state to withhold millions in revenue sharing. BAHOU/DFP

Krystal Crittendon, the top city lawyer at the center of a firestorm over her legal challenge of a financial stability agreement with the state designed to save Detroit from bankruptcy, says there is an irony in her taking legal action that the state now says could force Detroit to go broke this week.

Crittendon, in a letter to colleagues in the city’s law department, said she argued against changing Detroit’s city charter last year to give too broad independence to the position of corporation counsel, or lead city attorney.

Despite her misgivings, the city’s charter revision commission granted the law department a new level of autonomy from the mayor’s office, largely with former Mayor Kwame Kilpatrick’s misuse of his authority while allegations of corruption were investigated in mind.

Crittendon said she told the charter commission she “did not believe it was necessary because attorneys are already bound by the Michigan Rules of Professional Conduct and that this provision would only cause dissension between the corporation counsel and one or both branches of city government. The charter commission insisted that one of the main reasons the City Council and the residents of Detroit wanted the charter revised was to give the corporation counsel the responsibility to enforce the charter and the independence to (sic) freely do so.”

That prediction, revealed in a letter Crittendon sent to her staff Sunday and obtained today by the Free Press, has come true in dire fashion. Even though, as Crittendon wrote in her letter, “I did not believe that I would be the corporation counsel to have to invoke these provisions. Little did I know that this would not be the case.”

The letter provides the first detailed look at the motivations behind Crittendon’s legal challenge, a move that has put her on a hot seat and angered the administrations of Mayor Dave Bing and Gov. Rick Snyder, who brokered the consent agreement. Crittendon has declined to speak publicly about her challenge of the deal and would not discuss the letter today.

According to her letter: “the Complaint for Declaratory Judgment was filed for one reason: it was the charter-mandated responsibility of the corporation counsel to do so.”

In her letter, she said: “Initially, both the Mayor and 8 members of Council fully supported the fact that a leter would be sent to the State, advising that the FSA (Financial Stability Agreement) was void and unenforceable pursuant to state law. Unfortunately, however, things changed quickly as we were trying to gather all of the outstanding debt owed by the State.”

Crittendon filed suit last week against the consent deal, saying the state owes Detroit $224 million in revenue sharing and millions more in unpaid water bills, back taxes and parking tickets. The city charter, she argues, prohibits Detroit from entering into contracts with entities in default to it.

Under the charter, Crittendon is obligated to investigate and pursue violations of the city charter. She argues that’s what her legal challenge is all about – and a majority on the City Council agreed with her today when Mayor Dave Bing urged with them to vote to ask Crittendon to drop her suit.

State Treasurer Andy Dillon’s office sent a letter last week to Detroit’s new chief financial officer, Jack Martin, warning that unless Crittendon stands down, the state will withhold revenue sharing payments Detroit needs to stay afloat. The state says Crittendon’s lawsuit raises questions about whether Detroit can be required to pay off the bonds, so the state will use $80 million in revenue sharing to pay Detroit’s bond debt, unless Crittendon relents.

Crittendon’s letter says she was duty-bound to investigate concerns — at the request of councilwoman JoAnn Watson — that the state’s debts to Detroit invalidated the consent agreement, and equally obligated to pursue her findings.

“It is incredulous that the same media outlets which desecrated the law department in past years because they contended its lawyers were unscrupulous, immoral, lawless and unprofessional would now be outraged that the law department is not pandering to either branch of city government,” she wrote, in apparent reference to the Kilpatrick era.

“If the city’s arguments are meritless and frivolous, then the state will prevail in court. We have asked the state to stand with us in asking that the court hear this case quickly and rule expeditiously so that both parties can legally move forward appropriately. The state has not chosen to respond to our request and has still not even filed a response to what they contend is a meritless, losing argument” by the city.

Crittendon said claims that her request for a judge to decide whether her findings are valid jeopardizes the city’s financial future are “nonsense.” She laid the blame for the impasse over her legal challenge at the feet of the private law firm, Miller Canfield, that Bing hired to handle the consent agreement and the bond deal with the state.

“If any financial or legal consequences flow from this representation because the bonds were not protected in the deals, those consequences are the responsibility of that firm, and not the city of Detroit law department,” Crittendon wrote.

If a judge rules against Crittendon, “so be it,” her letter said. “That would not in any way change the fact that it was the law department’s responsibility to have filed it.”

Crittendon wrote that she takes all of her professional, legal and moral responsibilities seriously. “They are not for sale,” she wrote, “and will not be compromised.”